Let’s get this straight.
- Most money is created by banks as debt, i.e. ‘out of thin air’.
- Banks ensure they keep plenty for themselves, the grandest buildings, the biggest salaries, huge bonuses.
- Eventually they always lend too much, confidence declines, some bank(s) get(s) into trouble because there is a run on the bank, because the money doesn’t really exist.
- So a bank or two fails, but is usually bailed out by governments.
- So governments need to borrow a bit more from… banks.
- And/or they take it from the people by ‘austerity’, reduced public services or additional taxation.
- And they say there was too much debt, another way of saying it was the banks wot did it.
- And the most egregious banking behaviour appears to be but lightly punished – the rewards appear to greatly outweigh the risks.
You couldn’t make it up!
There must be a better system. At least someone’s proposing solutions. See eg Positive Money.